# Cost-per-hire

Cost-per-hire is the total money spent on recruiting in a period, divided by the number of people hired in that same period.

It's a budgeting metric, tallying everything from job ad spend to agency fees against the actual headcount that resulted.

**Cost-per-hire** — Cost-per-hire is calculated by adding up total recruiting costs, external and internal, over a set period and dividing by the number of hires made in that same period. External costs typically include job board and advertising spend, staffing agency or recruiter fees, referral bonuses paid to employees, and background check fees. Internal costs usually cover a share of the recruiting team's salaries, recruiting software subscriptions, and any relocation or signing bonuses tied to closing a hire. The formula produces an average, which means one very expensive executive search or agency-filled role can pull the whole number up even if most other hires that period came through cheaper channels like the company's own job board or employee referrals. Companies typically calculate it quarterly or annually and split it out by department or role type, since an engineering hire sourced through a specialized agency costs far more to land than a role filled from a company's own applicant pipeline.

Cost-per-hire is the number finance and recruiting leadership use to judge whether the hiring process is spending efficiently, and it tends to move with two things: how much a company relies on paid sourcing or outside agencies versus its own pipeline, and how long positions stay open. A role that sits open for months keeps racking up advertising and tooling costs even before anyone's hired, which is part of why cost-per-hire and time-to-fill are usually reviewed side by side rather than in isolation.

## Frequently asked questions

### Does cost-per-hire include salary for the new employee?

No. Cost-per-hire only covers the cost of recruiting and hiring someone, such as advertising, agency fees, and recruiter time, not the ongoing salary or benefits paid to that person once hired.

### Why does cost-per-hire vary so much between roles?

Sourcing method is the biggest driver. A role filled through an employee referral or a company's own applicant pool costs far less than one that required a paid staffing agency or an extended paid advertising campaign to fill.

### How often do companies calculate cost-per-hire?

Most calculate it quarterly or annually, and many break it down further by department or role type, since the average across an entire company can hide very different costs between, say, an entry-level hire and a specialized senior search.

## Related pages

- [Time-to-fill](/glossary/time-to-fill)
- [Quality of hire](/glossary/quality-of-hire)
- [Browse open roles](/jobs)

## Lower cost-per-hire without lowering the bar

Intervieux's job board runs candidates through a real AI screening interview before a recruiter ever spends time on the application, cutting the manual review that drives up recruiting cost.

Start practicing free: https://www.intervieux.ai/register · Hire with Intervieux: https://www.intervieux.ai/employers/signup